Quiz property arm slips into administration as it eyes store portfolio restructure

The brand operates 82 standalone stores in the UK and Republic of Ireland through its wholly owned subsidiary Kast Retail Limited and has made the decision today to seek the appointment of administrators from KPMG.

In a statement to the City, the retailer than said it is “proposing to subsequently acquire from Kast (acting through its administrators) the business and certain assets of Kast for a cash consideration of £1.3m”.

This will take the of Zandra Retail Limited, another wholly owned subsidiary of Quiz, acquiring the business assets of Kast after the appointment of administrators. As a result, 93 of the 915 current staff of the Kast subsidiary will be made redundant.

Zandra will also take up new lease agreements on both the group’s head office in Glasgow and its distribution centre in Bellshill.

Quiz said this proposal would “enable the group to operate an economically viable store portfolio alongside its online, UK concession and international channels” which will be unaffected by the administration.

The retailer blamed the administration on the enforced closure of stores due to the coronavirus pandemic; accelerating shift in consumer behaviour towards online; “difficulty in renegotiating reductions to the high levels of rents and rates” and a “sustained period of macro-economic uncertainty” in the UK.

As of June 9, 2020, Quiz said it had £5.93m of cash and additional banking facilities of £1.75m and was still in discussions about securing a longer-term credit line.

Chief executive Tarak Ramzan said: “It is with deep sadness and regret for some of our colleagues and partners that we had to take this decision to restructure the group’s operations. Physical retail in the UK was facing a major structural challenge prior to the outbreak of Covid-19 with the economics of operating stores on traditional leases becoming increasingly difficult.

“Whilst we have taken pro-active actions over the past 18 months to drive footfall to our stores and renegotiate leases to improve performance, the significant economic uncertainty we now face as consumers and businesses emerge from the Covid-19  pandemic has meant that, in order to ensure a sustainable future for the group, we have taken this decision to place the subsidiary which operates our stores into administration.

“We continue to believe that stores, with appropriate property costs and flexible lease terms, can continue to be a relevant pillar in our omni-channel model and we will be seeking to re-open Quiz stores where we believe it is prudent and economic to do so. We believe that with an appropriately structured store estate in combination with our capital light concession model, international channel and online focus Quiz will be better positioned for all its stakeholders over the long-term.”